Economic activities that can be carried out electronically

This includes trading through websites, own or intermediary platforms, as well as social networks (e.g. Facebook, Instagram, etc.). Sales can be carried out in three ways:

• Between two businesses (Business to Business – B2B);
• Between business and consumer (Business to Client – B2C);
• Between two non-business natural persons (Client to Client – C2C).

Each type of relationship has specific rules for tax treatment. Therefore, depending on these relationships, general and special rules apply for the tax treatment of transactions.

Digital influencers, also known as bloggers, vloggers, or other names, are people who have a large following on social networks or digital platforms and influence the thoughts, behaviours, or decisions of their followers. They use this influence to promote products, services, or ideas in exchange for compensation.

Influencers operate on various social networks and platforms such as Facebook (Meta), Instagram, Tik Tok, YouTube, etc.

Influencers create and distribute content such as:

• Photos and videos featuring the products;
• Descriptions or comments about services;
• Short or long videos where they talk about their experiences;
• Collaborations with companies that pay for advertising.

This content aims to influence followers, encouraging them to buy or use what is being promoted.

Platforms or companies pay these people for using their followers for commercial purposes, and payments are made through bank accounts or other forms of electronic payment.

If an influencer earns income (in cash or other forms), this activity is considered an economic (business) activity and he/she is considered a self-employed person, therefore, his/her income is taxable according to the tax legislation in force in the Republic of Kosovo.

Even goods or services that influencers receive in exchange for promotion (e.g. through barter) are considered taxable income and are taxed at market value.

Hence, if an influencer receives free goods or services in exchange for promoting them to his/her followers, the value of the goods or services is considered taxable income at the open market value. For instance, if an influencer receives a camera worth 800 euros from a company in exchange for promoting this camera in their profile, even though they do not receive money, the value of 800 euros is considered income and shall be taxable.

Outsourcing represents a form of business collaboration where a natural person or a company provides services to another party (usually a company), without being directly employed by that company.

So, people who offer their services as outsource work are those people who provide services in various professional activities for their external clients (customers) and work remotely, via the internet, such as: in the development of software applications, technical support, sales, customer services, design, etc.

Outsource work means delegating internal company tasks to external workers, such as company contractors, freelancers, other self-employed individuals, or another business. If work is taken over by another company, it is considered to have been accepted as outsourcing work.

Example for illustration: A graphic designer in Kosovo agrees to create a logo and visual identity for a company in Germany. He/she is not employed by the company, but provides the service as a self-employed person, based on a contract for services. After the project is delivered, he/she gets paid through the bank. This income is subject to tax in Kosovo and he/she is responsible for declaring and paying the tax according to the tax legislation in force in the Republic of Kosovo.

Independent workers, also known as freelancers, are self-employed individuals who provide professional services to various clients, without being regularly employed by any company or organization. They usually work on a project or short-term contract basis, acting as independent contractors.

Freelancers enjoy flexibility in their working hours and work locations and can provide services to both domestic and international clients. They are usually professionals who specialize in certain fields, such as information technology (IT), engineering, medicine, finance, law, journalism, graphic design or architecture, art, translation, crafts, etc.

Income earned by freelancers is considered taxable income and is treated in accordance with the tax legislation in force in the Republic of Kosovo.

Examples of common situations for freelancers:

• A graphic designer who carries out projects for foreign companies through online platforms and is paid regularly is considered a freelancer and is obliged to declare income.
• A programmer who receives temporary contracts from local or international companies for software development must register as a person carrying out economic activity and pay tax on the income generated.
• A freelance translator who provides services to institutions or organizations, on a recurring basis, should be treated as a regular taxpayer for independent economic activity.